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Limited Partnership Agreement
1. Introduction. Agreement forming a limited partnership (Partnership) made [date] among [names and addresses] (General Partners) and [names and addresses] (Limited Partners).
2. Partnership Name and Address. General Partners and Limited Partners form a limited partnership in accordance with the laws of [state]. Partnership's name will be [name], and its principal place of business will be located at [address].
3. Partnership Business. Partnership's business will be [nature of business].
4. Duration of Partnership. Partnership will begin on [date] and will continue until it terminates in accordance with the provisions of this Agreement.
5. General Partners' Capital Contributions. General Partners shall make the following contributions to Partnership's capital no later than [date].
[schedule of cash contributions showing the General Partners' names and the amounts contributed]
[schedule of property contributions showing the General Partners' names, descriptions of property, and values of the property]
6. Limited Partners' Capital Contributions. Limited Partners shall make the following contributions to Partnership's capital no later than [date].
[schedule of cash contributions showing the Limited Partners' names and the amounts contributed]
[schedule of property contributions showing the Limited Partners' names, descriptions of property, and the value of the property]
7. Additional Capital Contributions From Limited Partners. General Partners may call for additional cash contributions to Partnership's capital from Limited Partners. The aggregate of all additional capital contributions made by Limited Partners pursuant to this Paragraph shall not exceed ........ percent (........%) of the original capital contributions made by them pursuant to Paragraph 6 of this Agreement. Notice of the call shall be made by registered or certified mail, return receipt requested, and shall be deemed made when posted. Limited Partner's additional capital contribution must be made no later than [number] days following the call.
8. Division of Profits and Losses. The first ........ dollars ($........) of expenses shall be charged to Limited Partners' income accounts as their interests may appear. Thereafter, one half of all expenses shall be charged to General Partners' income accounts and one half to Limited Partners' income accounts as their interests may appear. The first ........ dollars ($........) of income shall be credited to Limited Partners' income accounts as their interests may appear. Thereafter, one half of all income shall be credited to General Partners' income accounts and one half to Limited Partners' income accounts as their interests may appear.
9. Liability of Limited Partners for Losses. Notwithstanding the provisions of Paragraph 8 of this Agreement, Limited Partners will not be liable for any Partnership debts or losses beyond the amounts to be contributed by them pursuant to Paragraphs 6 and 7 of this Agreement.
10. No Interest on Capital. No interest will be paid on any balances in General Partners' and Limited Partners' capital accounts.
11. Management of Partnership. General Partners will manage Partnership and maintain its books and records. General Partners shall have an equal voice in the management of Partnership, and each shall devote his full time to the conduct of Partnership's business. Without the others' written consent, no General Partner shall on Partnership's behalf:
a. Borrow or lend money;
b. Make, deliver, or accept commercial paper;
c. Execute any mortgage, security agreement, bond, or lease; or
d. Buy or execute a purchase agreement or sell or execute a sales agreement for any property other than that bought or sold in the regular course of Partnership's business.
12. Limited Partners Not to Manage Business. Limited Partners will not manage the business of Partnership nor assist in its management. No Limited Partner will:
a. Act as agent for Partnership or have the right to bind Partnership;
b. Sign or issue checks, promissory notes, or other commercial paper or documents of indebtedness on Partnership's behalf; or
c. Receive any salary or other compensation from Partnership other than to share in its profits or losses.
13. Partnership Books and Records. Partnership books of account will be kept in accordance with generally accepted accounting principles. The books and supporting records will be maintained at Partnership's principal office and will be examined by Partnership's certified public accountants at least [frequency]. Partnership's fiscal year shall start on [month and day] and close on [month and day]. Partnership's certified public accountants shall prepare an income statement and balance sheet for each fiscal year within [number] months after the end of the fiscal year. These financial statements shall be binding upon General and Limited Partners as to income or losses and the balances in General and Limited Partners' income and capital accounts.
14. General Partners' Salaries. General Partners shall each receive a salary of ........ dollars ($........) per annum, payable in monthly installments, as compensation for managing Partnership. No increases shall be made in General Partners' salaries without the written consent of a majority of Limited Partners.
15. Admission of New General Partners. No new General Partners will be admitted to Partnership without the written consent of all General Partners and Limited Partners as to both General Partner's admission and the terms on which new General Partner is admitted.
16. Admission of New Limited Partners. No new Limited Partner will be admitted to Partnership without the written consent of all General Partners and Limited Partners to both Limited Partner's admission and the terms on which new Limited Partner is admitted.
17. No Sale of, Assignment of, or Granting Lien on Partnership Interest by General Partner. Without the written consent of all General Partners and Limited Partners, no General Partner shall assign, mortgage, or give a security interest in General Partner's Partnership interest.
18. Right of Limited Partner to Assign Partnership Interest or Substitute New Limited Partner. No Limited Partner may assign Limited Partner's interest in Partnership or substitute a third party in Limited Partner's stead as new Limited Partner.
18. Right of Limited Partner to Assign Partnership Interest or Substitute New Limited Partner. Upon [number] days' written notice to General Partners, Limited Partner can assign Limited Partner's interest in Partnership's profits to a third party. Such assignment shall not constitute a substitution of the third party as new Limited Partner in the place of the assignor. Limited Partner may substitute a third party in Limited Partner's place as new Limited Partner only with the consent in writing of all General Partners and Limited Partners.
19 Right of Limited Partner to Transfer Partnership Interest by Will or Trust Instrument. Notwithstanding the provisions of Paragraph 18 of this Agreement, Limited Partner may transfer Limited Partner's interest in Partnership by will to any person or by gift to or inter vivos trust for the benefit of Limited Partner's spouse or issue, without notice to or the consent of General Partners or Limited Partners.
20. Effect of Death, Disability, or Retirement of a General Partner. The death, retirement, or permanent disability of a General Partner that makes it impossible for General Partner to carry out General Partner's duties under this Agreement shall terminate Partnership. However, if a General Partner survives, that General Partner shall purchase the deceased or withdrawing General Partner's interest in Partnership in accordance with a separate agreement between them, a copy of which is attached to and made a part of this Agreement [omitted], and surviving General Partner shall continue to conduct Partnership's business.
Upon the death, retirement, or permanent disability of last surviving General Partner, Partnership shall terminate and be liquidated in accordance with the terms of Paragraph 23 of this Agreement.
21. Effect of Death of Limited Partner or Substitution of Limited Partner. The death of a Limited Partner or the substitution of a new Limited Partner for a Limited Partner shall not affect the continuity of Partnership or the conduct of its business.
22. Voluntary Dissolution. General Partners may terminate Partnership at any time upon [number] days' written notice to each Limited Partner. Upon termination of Partnership, it shall be liquidated in accordance with Paragraph 23 of this Agreement.
23. Liquidation of Partnership. If Partnership is liquidated, its assets, including its goodwill and name, shall be sold in the manner designed to produce the greatest return. The proceeds of the liquidation shall be distributed in the following order:
a. Discharge of Partnership's debts and liabilities;
b. To Limited Partners in payment of the balances in their income accounts;
c. To Limited Partners in payment of the balances in their capital accounts;
d. To General Partners in payment of the balances in their income accounts; and
e. To General Partners in payment of the balances in their capital accounts.
24. Controlling Law. This Agreement shall be interpreted under the law of [state]. Further, each Partner, General and Limited, consents to the jurisdiction of the courts of [state].
25. Service of Notices--How Accomplished. Service of notice upon Partnership will be made by registered or certified mail, return receipt requested, addressed to Partnership's principal place of business.
Service of notice upon any or all General and Limited Partners will be made by registered or certified mail, return receipt requested, addressed to the addresses given in this Agreement or such other addresses as a General and Limited Partner may from time to time give to Partnership.
26. Arbitration of Disputes. Any controversy concerning this Agreement will be settled by arbitration according to the rules of the American Arbitration Association, and judgment upon the award may be entered and enforced in any court.
*** If Required By State Law ***
This Section for Notary:
State of _________
County of ________ [County]
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
My commission expires: _____